State policy of the innovative start-up development in the interest of endogenous economic development: best foreign practices and recommendations for Ukraine

Abstract

The purpose of the article is to substantiate the theoretical and applied principles of small innovative entrepreneurship and develop recommendations for policies to promote the establishment of innovative start-ups, taking into account the best foreign practices in the interests of endogenous development of Ukraine’s economy. It is shown that the vital link in the ecosystem of start-ups is an entrepreneur-innovator. It is justified that the state’s efforts to accumulate knowledge and human capital should be complemented by encouraging innovative entrepreneurship. It has been found that the integration of start-ups into social networks and their close connection with the external environment is crucial, as well as the qualities of the entrepreneur-innovator and his team to overcome the problems of “novelty vulnerabilities” and “minor vulnerabilities”. Authors demonstrate that in the conditions of limited assets and a highly competitive market environment, the most perspective direction of developing innovative start-ups is their establishment of symbiotic relations with reputable companies. Their dynamic interaction and complementary measures, on the one hand, will ensure the viability of start-ups, and on the other, they will strengthen the technological potential of the existing business. Paper reveals the peculiarities of the policy of innovative entrepreneurship in the OECD countries. Development of innovative start-ups is a systemic process in which the government creates favourable conditions for its participants and directly participates itself. The state acts as an entrepreneur-innovator, taking on the risks of innovation related to uncertainty, and at the same time plays a role a contractor who buys an innovative product of start-ups, created with financial assistance within budget programs. Such policy of assistance at all stages – from development to implementation and introduction to the market promotes endogenous economic development and strengthening its position in the world market. It is revealed that the legislation of Ukraine only fragmentarily mentions certain aspects of the functioning of entities that form the ecosystem of innovative start-ups, without combining them into a single structure. This complicates the formation and implementation of a purposeful state policy to create necessary conditions and mechanisms to stimulate innovative entrepreneurship. To address the shortcomings, the authors propose regulatory and institutional changes. Paper recommends developing essential documents: the draft Law of Ukraine “On technology-oriented start-ups” and the project “Strategy for the development of technology-oriented start-ups in the interests of innovative development of the Ukrainian economy”.